The AUD started its first trading day of the week on the backfoot this Monday. The previous week’s performance meant that the GBPAUD interbank exchange rate is sitting at around $1.876 AUD, at the time of writing. The ongoing US trade deals were keeping many countries on the edge of their seats as a preliminary deal looked like a done deal. However, recent unfolding’s have saw president Trump denying tariff rollbacks requested by China.
Trump Stands in the Way of Currency Boosts Across the World
The US-China trade deals have been in focus over the past couple of weeks. Progress was looking good as the United States and China looked to be agreeing with each other. But Monday revealed that president Trump was very reluctant to rollback the US tariffs on China. Trump denoted that he did not agree to any such deal which has poured cold water on the optimism of many. With a lower chance of the US-China trade deal looking more unlikely after this revelation, the AUD has taken a hit, and with the Australian dollar being a proxy for China, the disappointing news weighed heavy on the currency.
Disappointing News Shakes up Global Economy
The AUD is not the only currency affected by the US-China trade news. The USD itself saw a dip in its trading rate yesterday as investors looked to process Trump’s decision on tariffs. Ironically, the resolution for the global market dip would be for the trade war to cease and a roll back of the levies could resolve the low performances across the board. But Trump seems adamant and this only drives a further wedge between the two countries, dropping hopes of a deal working out.
AUD Outlook Following the Trade Deal News
As mentioned, the Australain dollar heavily relies on China and with the deal looking cold at the minute, Australian optimism for a boost from the deal is drying up. Looking forward, the upcoming Australian business conference is looming and looks to have the potential to weaken the AUD further. Analysts are expecting a loss as the Aussie business sentiment is looking to remain pessimistic as a result of the ongoing US-China trade dispute.
The AUD will hope that Trump gets back on track with the trade talks as the current negative potential outlook looks to sink the AUD, should things turn positive however there will be a lift which many are crossing their fingers for.
Feel free to email me, Dayle Littlejohn if you would like to know more on the factors affecting the AUD/GBP pairing or have an upcoming currency transfer [email protected].